Afternoon report: Corn, soybeans and wheat all spill into the red on Monday.
Traders await the next round of corn and soybean planting data later this afternoon, and analysts expect USDA to show some decent progress despite fieldwork delays due to rain in some areas. That put grain prices on their heels Monday, with corn prices sinking 1% lower and soybeans eroding 2.25% lower today. Wheat prices were mixed but mostly lower, pressured by precipitation across the Great Plains that could help this season’s drought-stressed winter wheat acres.
Ample rains are expected across the central U.S. over the next seven days, according to the latest NOAA forecasts. A large portion of the Corn Belt is expected to gather 1.5″ or more through May 10.
NOAA’s 8-to-14-day outlook predicts more seasonally wet weather for the Plains and western Corn Belt between May 9 and May 15, with warmer-than-normal conditions returning to the central U.S. during this time.
On Wall St., the Dow dropped 425 points in afternoon trading to 32,551, extending April’s total losses of 4.9%. Investors continue to express concern over a variety of issues, especially rising interest rates and historically high inflation. Energy prices moved higher. Crude oil firmed 0.5% this afternoon to reach $105 per barrel. Red-hot diesel prices climbed another 4% higher, with gasoline up 2%. The U.S. Dollar firmed moderately.
On Friday, commodity funds were net buyers of corn (+1,500), soybeans (+1,500) and soymeal (+1,000) contracts but were net sellers of soyoil (-3,500) and CBOT wheat (-9,000).
NOTE: Once again this season, Farm Futures will be collecting and regularly sharing farmer anecdotes in our Feedback from the Field series. The first round is already out – click here to see what’s happening around farm country and learn how you can participate.
Corn
Corn prices failed to find any positive momentum in Monday’s session after incurring moderate overnight losses. Technical selling continued through a choppy session, with prices closing around 1% lower. May futures dropped 5.5 cents to $8.1275, with July futures down 9.25 cents to $8.0425.
Corn basis bids were steady to firm after rising 2 to 7 cents higher across six Midwestern locations on Monday.
Corn export inspections reached 66.3 million bushels last week, firming slightly higher week-over-week. It was also on the high end of trade guesses, which ranged between 39.4 million and 69.9 million bushels. China was the top destination, with 11.1 million bushels. Cumulative totals for the 2021/22 marketing year are still moderately below last year’s pace, however, reaching 1.440 billion bushels.
Ahead of the next crop progress report from USDA, out later this afternoon and covering the week through May 1, analysts expect to see corn plantings move from 7% a week ago up to 16%. Individual trade guesses ranged between 12% and 24%.
Grain market analyst Bryce Knorr has five questions heading into the May World Agricultural Supply and Demand Estimates (WASDE) report from USDA. For starters, how will drought in the West affect U.S. winter wheat production? And how will war affect Ukraine and Russian production and exports? Knorr walks through these questions and more in today’s Ag Marketing IQ blog – click here for details.
The U.S. Environmental Protection Agency forwarded its rule on biofuel blending mandates to the White House for a final review. In December, the EPA said it would retroactively set renewable fuel volumes at 17.13 billion gallons for 2020, but it wasn’t immediately known whether changes have since been made to this proposal. EPA also had set volumes of 18.52 billion gallons for 2021 and 20.77 billion gallons for 2022.
Preliminary volume estimates were for 212,810 contracts, tracking slightly below Friday’s final count of 230,409.
Soybeans
Soybean prices succumbed to a round of technical selling, spilling 2.25% lower on Monday. Traders are focused on rainy forecasts that may result in more corn acres getting swapped for soybeans this season. May futures lost 34.25 cents to $16.74, with July futures down 38.25 cents to $16.4650.
Soybean basis bids were steady to mixed to start the week after jumping 5 to 30 cents higher at three Midwestern processors and fading as much as 7 cents lower at an Illinois river terminal today.
Soybean export inspections shifted slightly below week-ago totals, with 22.1 million bushels. That was also on the lower end of trade guesses, which ranged between 18.4 million and 36.7 million bushels. China topped all destinations, with 8.5 million bushels. Cumulative totals for the 2021/22 marketing year remain well below last year’s pace, with 1.735 billion bushels.
Ahead of this afternoon’s crop progress report from USDA, analysts expect the agency to show soybean plantings move from 3% a week ago to 8% through May 1. Individual trade guesses ranged between 5% and 10%.
Preliminary volume estimates were for 127,262 contracts, firming slightly above Friday’s final count of 109,124.
Wheat
Wheat prices were mixed but mostly lower. Winter wheat contracts faced moderate cuts after analysts predict USDA will raise its quality ratings later this afternoon. Some spring wheat contracts firmed slightly, in contrast. July Chicago SRW futures fell 3 cents to $10.5275, July Kansas City HRW futures dropped 10.5 cents to $10.9525, and July MGEX spring wheat futures picked up 1.5 cents to $11.6750.
Wheat export inspections rose moderately above the prior week’s tally, with 14.2 million bushels. That was also toward the higher end of analyst estimates, which ranged between 8.3 million and 18.4 million bushels. Mexico was the No. 1 destination, with 3.6 million bushels. Cumulative totals for the 2021/22 marketing year are still moderately below last year’s pace, with 688.7 mil-lion bushels.
Ahead of the next USDA crop progress report, analysts expect the agency to show a one-point improvement to winter wheat quality ratings, with 28% of the crop in good-to-excellent condition through May 1. That’s the lowest level at this time of year since 1989. Spring wheat plantings are expected to move from 13% completion a week ago up to 20% through Sunday.
India is coming off an incredible streak of five record wheat harvests, but production estimates for 2022 put a sixth consecutive bin-busting season in doubt. Official government updates have yet to be made, but extreme temperatures earlier this year may lower production to 3.858 billion bushels. “Loss of production of wheat, all India basis, more or less stands around 6%, on account of shriveling of wheat grains around 20% due to terminal heat and heat waves,” according to a recent governmental note.
Preliminary volume estimates were for 71,257 CBOT contracts, shifting slightly above Friday’s final count of 65,637.
Settlement Prices for Key Commodities
High
Low
Last
Change
Corn $/bushel
22-May
814
798
813
-5.5
22-Jul
808.5
790.5
803.5
-9.25
Soybeans
22-May
1712.25
1664
1674
-34.25
22-Jul
1688.75
1635
1645.25
-38.25
Soymeal $/ton
22-Jul
434
424.1
430.9
-0.8
Soyoil cents/lb
22-Jul
84.53
79.39
80.09
-4.03
Wheat $/bushel
22-May
1050.25
1029.25
1043.5
-0.25
22-Jul
1071.5
1034.25
1055.5
-3
KC Wheat
22-May
1100.25
1081.75
1086.75
-4.25
22-Jul
1117.75
1086.75
1098
-10.5
MPLS Wheat
22-May
1167
1152.25
1163.25
-9
22-Jul
1181.25
1154.5
1167.75
1.5
Live Cattle cents/lb
22-Apr
135.775
132.925
135.05
2.4
Feeder Cattle cents/lb
22-May
174.45
169.625
174.25
5.975
Lean Hogs cents/lb
22-Jun
106.75
102.9
105.075
-1.3
Crude Oil $/barrel
*Energy prices may not represent final settlements
22-Jun
105.71
100.28
105.14
0.45
Diesel
22-May
4.238
3.9444
4.2274
0.2102
Unleaded Gasoline $/gallon
22-May
3.532
3.3466
3.5039
0.0615
Natural Gas
22-Jul
7.659
7.331
7.615
0.26
U.S. Dollar Index
22-Jun
103.775
103.12
103.755
0.792
Gold $/ounce
22-Jun
1900.4
1853.4
1861.7
-47.6
Copper
22-May
4.3855
4.19
4.2525
-0.1425
Fertilizer Swaps
(as of 04/29)
DAP Tampa-index
1,175.0
-7.5
DAP-New Orleans
989.3
-52.36
Urea-New Orleans
738.6
-99.21
Urea-Middle East
810.0
-140
Urea-Black Sea
585.0
35
UAN (32%) New Orleans
694.5
0
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